London stocks are expected to open slightly higher on Wednesday, with the FTSE 100 forecast to gain around 15 points as investors await key UK inflation and borrowing figures, while strong SpaceX earnings and potential merger talks with Tesla attract attention on Wall Street.
Futures indicate the FTSE 100 will open about 0.1% higher at 10,748.19, after Tuesday’s 31.69-point decline left the blue-chip index at 10,733.00.
Investor attention is focused on UK consumer price inflation and public sector borrowing figures, both scheduled for release at 7 am BST, ahead of the Government’s Budget on 28 October.
Economists expect annual UK inflation to accelerate to 3.4% in September from 3.1% in August, increasing pressure on the Bank of England as policymakers consider whether further interest rate increases are necessary.
Meanwhile, public sector borrowing is forecast to rise to £23.9 billion in September, compared with £18.3 billion in August, highlighting the fiscal challenges facing the Chancellor ahead of next week’s Budget.
The figures could influence expectations for both monetary policy and government taxation and spending decisions.
Sterling traded at $1.3376 against the dollar in early dealing, broadly unchanged from Tuesday’s close, while strengthening slightly against the euro to €1.1912.
US Treasury yields edged higher, with the benchmark 10-year yield rising to 5.13% and the 30-year yield reaching 5.44%.
Wall Street ended Tuesday’s session mixed, with the Dow Jones Industrial Average gaining 1%, the S&P 500 advancing 0.3% and the Nasdaq Composite closing marginally lower.
Technology earnings dominated attention after the closing bell, with SpaceX shares jumping 8.1% in after-hours trading following stronger-than-expected quarterly results.
The company reported a sharp increase in revenue, benefiting from growth across its satellite communications and artificial intelligence operations.
Elon Musk also confirmed that SpaceX and Tesla have established independent committees to explore a potential merger, although discussions remain preliminary and no agreement has been reached.
Any combination would bring together two of Musk’s largest businesses, potentially creating closer links between their AI, robotics, semiconductor and space infrastructure activities.
However, a transaction would require further negotiations and shareholder approvals.
Netflix shares fell 5.8% in after-hours trading, as investors reacted negatively to its latest results and concerns surrounding viewing engagement and future growth.
The streaming company defended its recent price increases, saying customer responses remained consistent with expectations, while acknowledging the need to accelerate growth in viewing hours.
Investors will now turn to quarterly results from Tesla and Meta Platforms, both scheduled for Wednesday after the US market close.
Asian markets delivered a mixed performance, with Japan’s Nikkei 225 rising 1.2%, while Hong Kong’s Hang Seng and China’s Shanghai Composite each declined 0.5%. Australia’s S&P/ASX 200 gained 0.2%.
Oil prices climbed sharply following renewed disruption to shipping through the Strait of Hormuz.
Brent crude rose to $110.33 a barrel, compared with $106.65 at Tuesday’s London close, after Iran’s Revolutionary Guards reported that three oil tankers had struck naval mines near the strategically important shipping route.
The incidents renewed concerns about energy supply disruptions and their potential impact on global inflation.
Gold eased to $4,121.11 an ounce, compared with $4,131.02 on Tuesday.
On London’s corporate calendar, investors will be watching trading updates from Fresnillo, Aberdeen and Segro, alongside the UK inflation and public borrowing releases.
The FTSE 100 faces a cautious but slightly positive opening, with stronger US corporate earnings providing some support while rising energy prices, inflation concerns and uncertainty ahead of the UK Budget continue to influence market sentiment.
Attention will now turn to whether the latest UK economic figures strengthen expectations for further Bank of England interest rate increases and how investors respond to the upcoming technology earnings announcements.
